1) Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet minimum capital requirements. For these purposes, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

Is this true or false?

2) In September of 2008, the FDIC paid JP Morgan Chase to purchase all of the assets of and assume all of the liabilities of Washington Mutual Bank. This was an outright bailout of a private company by the FDIC. What makes this more problematic is that uninsured creditors were compensated by the FDIC.

Is this true or false?

3) A bank that has (A-) rated debt will be able to issue bonds with yields that are below the U.S. Treasury Yield Curve.

Is this true or false?

4) If the yield curve flattens out then the spread between the yields a bank earns on its assets and the cost of funding these assets will decline.

Is this true or false?